7 Cases Of Cryptocurrency Money Laundering Under Investigation; Rs 135 Crore Attached, Says Government 

The government is aware of cybercriminals using cryptocurrency for money laundering, stated Pankaj Chaudhary, Minister of State for Finance, on Monday, during the second part of the Parliament's Budget session. 

“Reports have been received from Law Enforcement Agencies (LEAs) in connection with the usage of cryptocurrency by cybercriminals. The Directorate of Enforcement (ED) is investigating 07 cases under PMLA (Prevention of Money Laundering Act), 2002 in which cryptocurrency has been used for money laundering. Cases investigated by ED under PMLA, reveal that the accused have laundered Proceeds of Crime (PoC) through cryptocurrency,” Chaudhary stated in a written reply. 

The ED investigations so far have revealed that some foreign nationals and their Indian associates have laundered the proceeds of crime through cryptocurrency accounts at certain exchange platforms. In one such case, an accused was arrested by ED in 2020 “for facilitating foreign-related accused companies to launder the PoC by converting money generated out of crime into cryptocurrency and thereafter transfer to foreign countries. Prosecution complaint has been filed in this case before the Special Court, PMLA. So far, ED has attached PoC amounting to Rs 135 crore (approximately) under PMLA in the above mentioned cases,” the finance ministry stated. 

Rise In Crime 

Money laundering is one of the most prevalent crimes in the crypto market; instances have spiked nearly 30 per cent between 2020 and 2021, states 2022 Crypto Crime Report by blockchain data firm Chainalysis. The same report stated that cybercriminals laundered $8.6 billion worth of cryptocurrency in 2021. This was $6.6 billion in 2020. At $10.9 billion, year 2019 recorded the highest amount in laundering between 2017 and 2021. The study finds that these days in darknet market sales or ransomware attacks profits are virtually always derived in cryptocurrency rather than fiat currency, thus contributing significantly to the spike.  

Read more about crypto crimes here.

In India, virtual cryptocurrency exchanges have emerged as the new tax havens for laundering illegal cash. More than Rs 4,000 crore of such transactions have been unearthed by the ED in 2021.  

Interestingly, just the way criminals target specific crypto services for their illicit money laundering activities, they transact using only a few crypto coins. Chainalysis report noted that the highest share of all illicit transactions was received in Altcoins (68 per cent); the least was in Bitcoins (19 per cent). Money laundering in Ethereum was 63 per cent, and 57 per cent in Stablecoins.  

Read here about how terrorist groups are using crypto assets.